Decision details

Treasury Management Mid Year Review

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Decision Maker: Cabinet, Full Council

Decision status: Recommmend Forward to Council

Is Key decision?: Yes

Is subject to call in?: No

Decisions:

Chris Ward, Director of Finance and Section 151 Officer, presented his report and explained the implications of each of the recommendations to Council. A full version of Appendix B, setting out the Investment Counter Party List, was circulated at the meeting (and would also be submitted to Governance & Audit & Standards and the City Council).

Councillor Jones, as Leader, welcomed the approach being taken by the Director of Finance.

RECOMMENDED to Council:

1. That the annuity method of calculating the minimum revenue provision (MRP) for the repayment of debt is applied with effect from 2015/16 to General Fund post 1 April 2008 self-financed borrowing excluding:

· Finance Leases

· Service concessions (including Private Finance Initiative schemes)

· Borrowing to fund long term debtors (including finance leases);

2. That investments be made in enhanced or cash plus money market funds on the basis of a single credit rating and that these be treated as category 6 investments

3. That the investment counter party limits be revised as shown in Appendix B

4. That the following investment duration limits be approved:

	Maximum Duration Limit
Category 1 United Kingdom Government including the Debt Management Office Deposit Facility	Up to 5 years
Category 2 Local authorities in England, Scotland and Wales	Up to 5 years
Category 3 RSLs with a single long term credit rating of Aa-	Up to 10 years
Category 4 Banks (including equity trackers) with a short term credit rating of F1+ and a long term rating of Aa-. Aaa rated money market funds.	Up to 5 years
Category 5 RSLs with a single A long term credit rating of A-	Up 10 years

Category 6 Banks (including equity trackers) and corporate bonds with a short term credit rating of F1 and a long term rating of A+. Building societies with a short term credit rating of F1 and a long term rating of A. Enhanced money market funds with a single AA credit rating.	Up to 5 years.
Category 7 Banks (including equity trackers) and corporate bonds with a short term credit rating of F1 and a long term rating of A. Building societies with a short term credit rating of F1 and a long term rating of A-.	Up to 5 years
Category 8 Banks (including equity trackers) and corporate bonds with a short term credit rating of F1 and a long term rating of A-.	Up to 5 years
Category 9 Building societies with a short term credit rating of F2 and a long term rating of BBB.	Up to 2 years
Category 10 Unrated building societies in the strongest financial position	Up to 2 years
Category 11 Unrated building societies in a strong financial position	Up to 364 days

5. That the following actual Treasury Management indicators for the second quarter of 2015/16 be noted:

(a) The Council’s debt at 30 September was as follows:

Prudential Indicator 2015/16

Limit

£M

Position at 30/9/15

£M

Authorised Limit

503

469

Operational Boundary

484

469

(b) The maturity structure of the Council’s borrowing was:

	Under 1 Year	1 to 2 Years	3 to 5 Years	6 to 10 Years	11 to 20 Years	21 to 30 Years	31 to 40 Years	41 to 50 Years
Lower Limit	0%	0%	0%	0%	0%	0%	0%	0%
Upper Limit	20%	20%	30%	30%	40%	40%	60%	70%
Actual	1%	4%	3%	4%	17%	11%	19%	41%

Limit

£m

Actual

£m

Fixed Interest

304

218

Variable Interest

(358)

(242)

(d) Sums invested for periods longer than 364 days at 30 September 2015 were:

Maturing after	Original Limit £m	Actual £m
31/3/2016	243	159
31/3/2017	231	70
31/3/2018	228	5

Report author: Michael Lloyd

Publication date: 05/04/2016

Date of decision: 05/11/2015

Decided at meeting: 05/11/2015 - Cabinet

Accompanying Documents: